Industry Committee on Oct. 26th, 2010

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chair.

Good morning, ladies and gentlemen. My first question is for Mr. Perry.

Mr. Perry, you said that CAMR can work. Earlier, a member said that, over a period of five or six years, the regime was used only once. Why is CAMR underused? It's clearly underused. Why is that?

[Grant Perry]

Again, I can only speak to that to the extent that what has been effective, has been effective when it has been used. It took a very short time, as we've talked about. I can't speak to why other countries have not used it. You can postulate around it: is it an issue of voluntary licences, partnerships that are being developed elsewhere? Is it a question that the price is coming out of Indian, Brazilian, and South African generics that are substantially lower than Canada's, or is it our ease of access? There are a number of factors that contribute to it, but with a lack of attempt to use it, it indicates to me there's a lack of need for that particular piece of legislation. It does not mean there's a lack of need to meet humanitarian goals in the developing world, but if they're not accessing the legislation, I can't speak to why not.

[Russell Williams]

Mr. Bouchard, I can get you copies of documents issued by the Access to Medicine Foundation, which conducted an assessment of global trends. To answer your question, we began using our generic medicines through more voluntary and more creative measures. We could provide you with a long list of voluntary collaboration examples.

I think that we are beginning to see that in the case of our generic products and of patients who need them, there are quicker, more flexible and more effective measures than those included in the legislation. I think that we all want to do the same thing, but we must ask ourselves how we can save lives. Everyone is seeking ways to function as effectively as possible on a global scale. I would like to reiterate that, often, by collaborating with the makers of innovative and generic products, we find solutions that are independent from this legislation.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

You're talking about voluntary measures. You also said, Mr. Williams, that there's room for improvement. Aside from the amendments set out in Bill C-393, what changes could remedy CAMR's shortcomings?

[Russell Williams]

I think that all committee members could simply get in touch with generic medicine companies, encourage them to use the regime and discuss voluntary measures with them. That way, we could move forward together and find much more creative solutions. I don't think that amending the legislation is necessary.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Thank you.

[The Chair, Conservative, David Sweet]

Thank you, Monsieur Bouchard.

Thank you to all of our witnesses, both those present as well as by video conference.

We'll now suspend for five minutes.

Please, I would ask the other witnesses to make their way to the table. If you have conversations with the present witnesses, members, please take it outside so that we can make the transition in the room.

[The Chair, Conservative, David Sweet]

Ladies and gentlemen, we're continuing our 40th meeting now. I'd just like to let the witnesses know, both by video conference as well as live here, that I'm going to introduce you in a second.

For the witnesses and guests in the room, the members have been here since 8:30 this morning, and I think many of them had meetings prior to that as well. So if you see members getting up to go back to grab a morsel of food, please don't take offence to that. It's because I wouldn't want them to falter and pass out here from lack of nourishment.

In front of us we have Jim Keon, who's president of the Canadian Generic Pharmaceutical Association, and Jody Cox, director of federal government relations. As well, we have David Schwartz, chair of the biotechnology patents committee with the Intellectual Property Institute of Canada.

By video conference...now I only see one person actually in front of me, but I see four squares by video conference, so I'll just make the introductions and hopefully they will come on the screen momentarily. There's Paula Akugizibwe, from AIDS and Rights Alliance for Southern Africa. As well, we have Andrew Jenner, director of intellectual property and trade with the International Federation of Pharmaceutical Manufacturers and Associations. We have Frank Plummer, scientific director general, national microbiology laboratory, for the Public Health Agency of Canada; and Antony Taubman, director of the intellectual property division with the World Trade Organization.

The witness we have in front of us now is Mr. Plummer.

Mr. Plummer, good morning.

[Dr. Frank Plummer, Scientific Director General, National Microbiology Laboratory, Public Health Agency of Canada]

Good morning.

[The Chair, Conservative, David Sweet]

Mr. Plummer, can you just say a few words, so we can make sure we have a good audio for you?

[Dr. Frank Plummer]

Sure. Hello, everybody. It's good to be here early in the morning in Seattle.

[The Chair, Conservative, David Sweet]

Thank you very much.

Mr. Plummer, because you're the one person we have by video conference and the technology is working, we're going to let you go ahead with your opening comments for five minutes, please.

[Dr. Frank Plummer]

Good morning again.

My name is Frank Plummer. I'm the scientific director of the National Microbiology Laboratory in Winnipeg and the chief scientific officer with the Public Health Agency of Canada. I'm also a distinguished professor at the University of Manitoba and a physician scientist who has spent his career working on HIV and AIDS in Africa. It is in those latter capacities that I'm appearing before the committee today.

I would like to thank the committee for soliciting my input and giving me the opportunity to talk about some of my work and, moreover, allowing me to appear from Seattle. I'm attending an important meeting of the Gates grand challenges in global health program, which I couldn't afford to miss.

I'd also be remiss if I didn't thank the Gates Foundation for the gracious loan of their video conferencing facilities.

I know the committee is reviewing legislation to make Canadian-made generic drugs still under patent by non-generic pharmaceutical companies more accessible and affordable for developing countries, and that the original legislation was targeted largely to antiretroviral therapy for HIV.

First I'd like to tell the committee about some of the amazing work Canada has done related to the HIV epidemic in Africa. I lived in Nairobi for 17 years, directing a highly acclaimed collaboration between the universities of Nairobi and Manitoba. The research done through this collaboration was among the first to recognize that HIV was widespread in East Africa and did pioneering work to understand the epidemic and how to prevent the transmission of HIV.

As committee members will know, HIV is transmitted primarily through heterosexual relationships in Africa, and it also spreads from mother to newborn child. Through research funded largely by the Government of Canada, we learned that commercial sex is a key driver of the HIV epidemic. Ordinary sexually transmitted diseases such as gonorrhea and chlamydia promote HIV transmission. Circumcision of men reduces their susceptibility to HIV, and breast feeding is an important risk factor for transmission of HIV from mother to child.

Each of these understandings was translated into effective interventions by our group and ultimately changed global health policy. They make up the core of effective HIV prevention in Africa and elsewhere. Many tens of thousands of people don't get HIV infected each year because of this foundation work done by the universities of Manitoba and Nairobi and funded by the Government of Canada.

This long-standing collaboration and my involvement in it continue. This year we celebrated our 30th anniversary. In recent years the research work of the collaboration has focused on understanding natural immunity to HIV. This work, which may discover how to make an HIV vaccine, is funded by the Government of Canada and the Bill and Melinda Gates Foundation, which is why I'm here in Seattle today.

The work is carried out in a state-of-the-art laboratory complex built and equipped with a grant from the Government of Canada through the Canada Foundation for Innovation. So Canada has done and continues to do a lot in the fight against HIV and AIDS in Africa.

Now to Bill C-393. It is beyond my competence to comment on whether the current legislation and proposed amendments to it are problematic or not. I know there's been criticism of the effectiveness of the current program and only one country has yet accessed it. However, I doubt that the structure of the Canadian program has anything to do with why it's not being used. I think most likely the original, well-intentioned program was overtaken by events. The global fund to fight HIV, tuberculosis, and malaria, the U.S. PEPFAR program, the President's emergency plan for AIDS relief, the availability of high-quality antiretrovirals from generic manufacturers elsewhere, and drops in the price of non-generic drugs all contribute to a lack of interest in the Canadian program, and that's seen with other programs of a similar nature around the world.

Unfortunately, you were unable to hear from my colleague, Dr. Kimani from Nairobi, but it's his experience that availability of antiretroviral drugs is not the real problem. The ability to deliver high-quality treatment programs with qualified personnel is more of a problem.

While I'm certainly supportive of making antiretroviral drugs available to those who need them, I would also remind the committee that the current antiretroviral drugs are not cures. Importantly, they prolong life; however, it's my belief we will not solve the HIV pandemic by treating AIDS. People are becoming newly infected with HIV at a far greater rate than they are being put on treatment. Furthermore, treating AIDS is many times more expensive than preventing an HIV infection. We know how to prevent new infections effectively and inexpensively, and in my view, far too little emphasis and investment has been put into simple preventive strategies that we know work. We also need to focus research on technologies to prevent HIV transmission such as a vaccine or a microbicide.

I'll close there with a thank you for asking me to speak to you today, and for your attention. I look forward to your questions.

[The Chair, Conservative, David Sweet]

Thank you very much, Dr. Plummer.

We will now move on to Mr. Keon, for five minutes, please.

[Jim Keon, President, Canadian Generic Pharmaceutical Association]

Thank you, Mr. Chair.

Thank you, ladies and gentlemen.

We're pleased to have the opportunity to speak to Bill C-393.

I represent the generic pharmaceutical industry, which has been an important part of the Canadian economy and health care system for more than 50 years. We are fortunate to have a large and sophisticated generic drug industry in Canada. Today it directly employs approximately 12,000 Canadians in high-skilled manufacturing and R and D positions.

Most of the generic drugs sold in Canada are manufactured in world-class facilities right here in Canada. The largest drug company in Canada, brand or generic, is Ontario drug maker, Apotex. The largest drug company in Quebec, brand or generic, is Pharmascience, also a generic.

Our industry fills six out of ten prescriptions in Canada today, and that number is growing quickly. There has been talk recently about the price of generic medicines in Canada and the ability to supply good-quality medicines at good prices abroad. Generic prices in Canada have traditionally supported pharmacy strongly. That system is changing. Provincial governments are changing that system. Generic drug prices in Canada have come down dramatically over the past year, as pharmacy funding is now being looked at in a different manner. Generic drugs have provided value for the Canadian health care system and are providing better value than ever.

In addition, Canadian generic drug makers actively support international humanitarian aid efforts. CGPA member companies are among the leading donors to Health Partners International of Canada, a non-profit relief and development organization that works through other partnerships to increase access to medicine and improve health in the developing world.

Our members are also active more recently in relief efforts in Haiti, donating millions of dollars worth of medicine through organizations like World Vision, Feed The Children, and Health Partners International.

This committee is studying a particular mechanism aimed at delivering drugs for humanitarian purposes to the developing world, Canada's access to medicines regime. The World Trade Organization decision, which is a decision of 120 countries, that led to the creation of CAMR, is a result of international recognition that the needs of the developing countries were not being met solely by the brand-name industry. Brand companies were generally unwilling, without competition, to lower their prices for drugs under patents to levels that these developing and least-developed countries could afford. That's why the international community came together and developed the so-called Doha agreement.

CAMR provides a legal and regulatory mechanism under which generic manufacturers in Canada are permitted to develop, produce, and export medicines covered by domestic patents to developing and least-developed countries for humanitarian purposes.

We've heard about some of the complexities of the regime, and we know that despite those, Apotex has developed and produced two shipments of its triple combination AIDS drug, Apo-TriAvir, to Rwanda. Unfortunately, the company has publicly stated that it will be difficult to use the regime again without changes being made.

There has been a lot of discussion this morning about whether CAMR works in its current form. The Canadian Generic Pharmaceutical Association's answer is no. Apotex's answer is no.

The problem with CAMR, which makes it ultimately unworkable, is the licensing scheme. The WTO decision that led to the creation of CAMR outlines four basic requirements that need to be met for an exporting country to grant a compulsory licence to a generic manufacturer, and these could have more easily been implemented by Canada. Instead, the CAMR licensing process is backwards; it is largely a process controlled by the interests of intellectual property rights holders and not the interests of those who desperately need access to life-saving medicines in times of health crises.

As outlined in our brief, CGPA supports the changes to the Patent Act that are outlined in Bill C-393. In our view, the streamlined application and licensing process in the bill embodies the spirit of the Doha declaration and the WTO decision, while at the same time ensuring Canada's compliance with its TRIPS obligations.

We have one issue with the bill, and that relates to the proposed amendment to the Food and Drugs Act that would allow for foreign drug approvals under CAMR. In our view, this is not necessary, and it's not supported by our association. The generic pharmaceutical industry continues to support a Health Canada approval.

With that, I will conclude my remarks, as I'm sure you will have several questions for the panel. I would be pleased, along with my colleague, to answer any questions you may have regarding Canada's access to medicines regime.

Thank you.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Keon.

We still don't have any of the other participants by video conference, so we'll go to Mr. Schwartz for five minutes.

[David Schwartz, Chair, Biotechnology Patents Committee, Intellectual Property Institute of Canada]

Thank you, sir. Bonjour, and good morning.

My name is David Schwartz. I'm a lawyer and a patent agent. I'm a partner in the firm Smart & Biggar, and I appear here today on behalf of my professional association, the Intellectual Property Institute of Canada, or IPIC.

I'm pleased to appear before you today on behalf of IPIC.

IPIC is the professional association in Canada of patent agents, trademark agents, and lawyers practising in all areas of intellectual property law. I'm the chair of IPIC's biotechnology patents committee and appear here today in that capacity. I have practised exclusively in the patent field for 17 years. My technical background is in genetics and my work principally involves assisting inventors in obtaining patent protection for their innovations at the Canadian patent office and those of other countries.

I hope I can provide some contributions to the very thoughtful and informed discussion we've heard this morning.

It's accepted that innovation is important to the economic and social well-being of our country. Patent legislation is a key element of any country's innovation system, and this legislation must achieve a fine balance between competing policy goals and must conform with a number of international treaties.

IPIC's expertise is in intellectual property law and not the manufacturing of medicines or the policy concerning assistance to developing countries. Our submission, therefore, is limited to studying the compliance of Bill C-393, in the form that we've seen it so far, I would emphasize, with the TRIPS agreement, and its possible effect on the patent system in Canada and elsewhere.

The TRIPS agreement of the WTO sets out agreed minimum standards for the protection of intellectual property rights. Member states may therefore provide more extensive protection than required by TRIPS, but they're not permitted to establish laws that provide less protection than required under the TRIPS agreement.

To use a very simplistic analogy, consider speed limits in school zones. If a provincial law, a law of Ontario, requires that the speed limit in a school zone be no more than 40 kilometres an hour for safety, the City of Ottawa would be permitted to lower the speed limit to 30 or 35 kilometres an hour, but we couldn't raise it to 50. I am going to come back to that point toward the end of my comments.

Article 31 of TRIPS provides for use of a patent invention by someone other than the patentee without the authorization of the patentee, in certain circumstances. Now importantly, paragraph (f) provides that the use of the invention shall be authorized predominantly “for the supply of the domestic market”. That would mean Canada. There are also requirements about remuneration of the patentee in the domestic market. These requirements are problematic for those countries that don't have the manufacturing capacity or technical expertise in their own markets, that is, in their own countries, to make and use a patented invention, even if they had the authorization to do so.

So the general council decision of the WTO in 2003 implementing paragraph 6 of the Doha declaration provides a solution to this problem—and I know we've already heard about it this morning. It waives paragraphs (f) and (h) of article 31 for pharmaceutical products in certain circumstances and sets out the requirements of a country, typically a least-developed or developing country, to import patented medicines under the waiver. The general council decision is, of course, implemented in Canada in the Patent Act as CAMR.

I emphasize these two points because the Canadian legislation must therefore comply with two significant aspects of TRIPS. First, there must be requirements for the rest of article 31 that wasn't waived. Second, the waiver of paragraphs (f) and (h), if it's to be used, must be done in accordance with the requirements of the general council decision, which is that it be used in good faith to protect public health, and not as an instrument to pursue industrial or commercial policy objectives. This purpose would be defeated if products supplied under the decision were diverted from the markets for which they were intended. Accordingly, all reasonable measures are to be taken to prevent such diversion in accordance with the relevant paragraphs of the general council decision. These overarching principles are explained in the chairperson's statement that was associated with the general council's decision, which I'm effectively quoting from.

If the Canadian legislation is not in compliance with TRIPS, the legislation is at risk of being challenged under the WTO dispute settlement procedure. Twice already, both times in 2001, it has been necessary to amend Canada's Patent Act as a result of challenges by other countries, where the WTO found that our law was not in compliance with TRIPS. In one instance, the challenge involved a complaint by the European Union about our stockpiling provisions, which Mr. Dearden mentioned. There was another instance, also in 2001, where we amended the act to change the term of patent protection after a complaint by the United States. So twice already we've amended our act in recent years because of complaints.

Objections in an international forum that our Patent Act doesn't comply with TRIPS create uncertainty and may diminish Canada's reputation as a country that respects IP rights, negatively affecting domestic and foreign investment in research and development. Thus, in our view, it is important that CAMR be compliant with TRIPS, so that it does not invite objections as described above.

This involves not only ensuring that the black-letter provisions of article 31 and the general council decisions are met, but also ensuring that the procedural aspects of the legislation provide the appropriate, practical safeguards to ensure that the purpose and intent of the waiver set forth in the general council decision is met.

To return very briefly to my speed limit analogy, sure, we can set a speed limit of 35, but if we don't inform the public of the speed limit, if we don't post signs, and if we don't have police to monitor the speed, then the limit is really, for practical purposes, not effective. So we have similar concerns with respect to some aspects of C-393.

To conclude,C-393 has clearly created debate. We've learned that this week and last week, and it has raised awareness about very important issues. However, as you'll see from our very detailed written submissions, we have concerns with respect to the bill's compliance with TRIPS and the general council decision, and we've identified some patent-specific issues as well.

Thank you for inviting us to appear.

Thank you for inviting our association to appear here, and I'd be very pleased to address any questions you have today.

Thank you.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Schwartz.

It appears that we've run out of witnesses, and we're having a challenge today--at least by video conference anyway. So we're going to go to our rounds of questioning now.

Over to Mr. Garneau for five minutes.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you, Mr. Chair.

My first question would be for Mr. Keon.

You say that the generic industry in Canada has had experience working with Health Partners International and other organizations, such as Feed the Children.

We're told that 95% of the drugs that are on the WTO list are not protected by patents, and I'd be interested, from the generic industry's point of view, to know how much involvement you have for these large numbers of drugs that are not patent-protected.

What kind of involvement does the Canadian generic drug industry have in Africa with non-patented drugs?

[Jim Keon]

As I mentioned, the generic companies are major contributors to Health Partners International. That's the group in Canada that deals most consistently with donations of medicines abroad, so we work very actively with them. Generics are now again filling the majority of the medicines they ship.

The generic industry in Canada is in many ways an international industry. So we have companies like Teva, Sandoz, which are large international companies that also have operations in Africa. Traditionally they can also supply drugs from elsewhere to Africa.

We do have Canadian-owned companies like Apotex and Pharmascience that ship directly from Canada and are active. Our industry is shipping products to over 140 countries around the world, including Africa.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

You don't happen to have a dollar figure, do you, for this?

[Jim Keon]

I do not.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Okay. All right.

Mr. Schwartz, there are different interpretations as to whether C-393 would result in a violation of our TRIPS agreements, and we've heard different people say it does and others say it doesn't. I believe you fall into the camp that says that we could be challenged on it. You spoke about article 31, and you spoke about the waivers associated with pharmaceuticals in certain cases.

I'd like to get a little bit more of a feeling. Let's say we have a situation where Canada is challenged. Let's say C-393 is accepted and we are challenged. What are the practical implications for a country like Canada? Intellectual property is pretty dry stuff. But for Canadians, I think it's important for us to understand the implications if somebody successfully challenges Canada on a violation of the TRIPS agreement.

[David Schwartz]

Thank you.

First, in terms of your preliminary remarks about where we fall, that's obviously a difficult issue. If you have read our submission, you will see that it really doesn't take a strong position one way or another, but it identifies the areas of possible concern. In fairness, you've heard people with much more expertise about TRIPS than I will ever have come at it from two different perspectives. That's the nature of these proceedings, and I would expect eventually the government has resources--Justice, the patent office lawyers--who can study these competing views and assess them.

To answer your question about what would happen, of course, we don't know the long-term outcomes. My concern would largely be...in some respects, it's a question of perception. We've agreed to minimum standards within TRIPS. We've agreed to minimum standards in NAFTA. Do we want to go forward with a bill or a law that could invite criticism and possibly have another challenge, whether or not successful? Of course, we heard today that no one would challenge this, or a challenge would succeed or fail. Our position is largely that, ideally, the appropriate balance would be struck first so that this doesn't happen.

From my perspective, I don't think it's a particularly good thing for our reputation, as protecting innovation, to twice have the provisions of our Patent Act struck down as being offside TRIPS. It's a position being taken in the international community, and I suppose it's common sense. We've agreed to have an act that is compliant with TRIPS, and how does it look, twice already, to have been demonstrably wrong and put forward legislation that doesn't comply with our agreements? That's almost a matter of fact, I think.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you.

One last quick question for Mr. Keon. CAMR, as it exists at the moment--and I'll say it again, I wish Apotex were here because they were centrally involved. Essentially what you're saying, representing your industry, is that CAMR doesn't work. I'd like you to tie it to the specific example where it was used once. What were the big obstacles?